Senator asks DOJ to look into car insurance repairs
Steering is illegal - the insured can take his car where he wants to be fixed - but because it's a matter of semantics and inference and delaying tactics, it's hard to prove when it happens. However, a class-action lawsuit brought by more than 500 repair shops in 36 states is going after "the top insurance companies" because of it.
Their efforts have been joined by at least one attorney general, US Senator Richard Blumenthal has asked the Department of Justice to investigate, and a CNN investigation has claimed to find numerous instances of the alleged practice. It's said these preferred shops "do the absolute bare minimum" in repairs and are using cheaper recycled and aftermarket parts, or worse, that aren't as safe as the manufacturer recommended replacement parts. One shop owner in Louisiana showed CNN a cracked Toyota Tacoma headlight that looked to have been scavenged from a previous accident, yet it was sent to him to use as an insurance-approved replacement part. He said that if he refuses to use that part or those like it, the insurance company takes its business elsewhere.
The Louisiana Attorney General's office also supplied photos of second-rate car parts that didn't perform like they should have in subsequent accidents. Louisiana has sued State Farm and is lining up to sue other insurers, and the Mississippi attorney general is preparing to sue.
This isn't a new fight, nor the first for Mississippi or Louisiana or State Farm: a Mississippi body shop sued State Farm in 1996 alleging steering, and the plaintiff won "a reported multimillion-dollar settlement" in a sealed judgment; State Farm was hit with another multimillion-dollar judgment in Illinois; a Long Island Press investigation in 2009 found the same practice in use at Progressive, as did a New York appellate court in a case that ran from 2007 to 2012; and a group of Florida body shops suing insurers have amended their complaint just this month saying they have proof that insurers are matching one another's rates. Insurance industry reps say the practice doesn't exist because it wouldn't be in their interest to use bad parts, that the preferred shop system is better for customers and their premiums, and attorneys for the industry couch the fight as a free speech issue. The courts will soon get another chance to weigh in.
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